Good Investing Talks - Tarek Müller, how does About You want to win globally?

Episode Date: May 4, 2022

About You is a very interesting German company that could be a potential global fashion leader.

This episode of Good Investing Talks is supported by Interactive Brokers. If you're ever looking for a broker, Interactive Brokers is the place to go. I personally use their service because I think they have a great selection of stocks and markets you can access. They have super fair prices and a great tracking system to track your performance. If you want to try out the offer of Interactive Brokers and support my channel, please click on the link below. There you will be directed to Interactive Brokers and can get an idea what they offer for you. I really like their tool

and it's a high recommendation by me. And now, enjoy the video. The audience of good investing talks is great to have you back. Today, I'm happy to welcome another German so we will kill some TH today. Tarik Miller is joining us from Hamburg. How are you doing, Tarek?

I'm doing fine. Sitting here in my home office. It is actually snowing here in Hamburg. Very unexpected. Yeah, I heard that some people will have snow in these cold days but here in Stuttgart there's no snow but it's rare that we have snow yeah not good not good for our business now this is like not the weather we would wish for yeah because now we need we we are for us it's always good if there's seasonality yeah so now it should

get a bit warmer and then slightly warmer and so on so forth because then people actually want to freshen up the water i hope it's coming back to seasonality which would be also good for you and also good for the people who don't want don't like winter um but maybe let us look out a bit longer and as i came above your materials i got stuck with your presentation on a slide three and there's your vision your vision is become the global number one fashion platform and i want to build our interview in the first phase and the first longer phase around this vision um i already Ready for that? I am.

Great. Maybe let us start with the web, become. Become means that you already have a certain position from where you're going to something. So maybe let us take the backward view and think, well, you can explain a bit what you have done in the last 70 years with About You. What is the founding story? What are the events there? Maybe walk us through this.

Yeah, happy to do that. So the company was founded 2014 by 100,000. is Visa, Sebastian Betts, Benjamin Otto, and me. And we founded the company was the vision of digitizing the offline shopping stroll. And that is actually based on something we saw

in the market. And that is that actually the majority of money spent in fashion, offline and online combined, especially in offline, is spent by people that buy something out of an impulse rather than out of a demand. So people take a shopping stroll in the offline

city center. You ask them, what are you meeting and they would answer something and then they would end up buying something else. And that is a very untypical customer behavior that you don't find in any other consumer category. So imagine someone walks into a media market, it's an electronic store. It is very unlikely that they walk in the electronic store to buy a radio and then they end up buying a TV. So this is nothing you buy out of nipples. In fashion, though, this is the normal customer behavior and actually accounts for the majority of revenues done offline. And And this was a part of the market that had not been digitized until what you came into play,

because the existing online players back then, namely Zalando, Amazon, Otto, and so on and so forth, were all centered around fulfilling a demand. Now, this is the e-commerce 1.0 model, basically. Someone goes to Amazon. You always visit Amazon if you have a demand, never without having a demand. So people are coming to a website with a demand, and then the whole e-commerce platform is focused on understanding the demand. fulfilling it the fastest way possible.

And we took a different approach with About You. We are trying to invite customers to visit our smartphone app frequently, even without having a demand, and then to really take a shopping stroll. So get inspired by content, outfits, editorial stories, now also things like live shopping, and then buy something out of an impulse. And that is new to the market, and that was basically the foundation idea, a founding idea that we had back then in 2014. So maybe looking back at the seven years and it's hard to do this exercise, what are three things you're especially proud of you've built in this last seven years?

First of all, it's fulfilling on the USPs that we also back then believed are the most important to correct that market. And that is, first of all, having the best smartphone app. We are having the best smartphone app when it comes to the app store ratings in the industry. Secondly, inspiring our consumers with great content. We have the largest and I would say best content powerhouse in fashion in Europe. And thirdly, it's personalization. That's also incorporated in our name. It's about you.

If I lock in on About You, the logo changes to about Tarek. So there's not one version of About You, but there are 30 million versions of about you representing our 30 million monthly active users. And with every click, the next click is getting better. So first thing I'm proud of is I think we have delivered on all of these three aspects being best in industry. Secondly, we started with the internationalization in October 2017, where we've opened our first non-German-speaking countries, being Belgium and Netherlands, and that had been a huge success for us. And I think looking back, I would have wished to internationalize earlier because internationalization is for us a huge lever in terms of growth, but also with every wave of internationalization, we managed to gain higher capital efficiency because we are optimizing our overall platform experience and we are optimizing our internationalization.

personalization playbook. And thirdly, in 2018, we have added another business segment to our overall group strategy. And that is our, in our financial reporting, we report this as TME. It stands for tech media and enabling. And this is essentially our B2B business. So here at our core, we are taking our proprietary technology and we license out this technology to third party brands and retailers as a software as a service model. And that is heavily growing and it's highly profitable. So, a very good addition to our commerce business. So you already mentioned the Otto family and there's also Anders Hoyt Pausen, I hope I spell his name right, otherwise correct me, who's backing you.

What role did they play in your founder's journey and how long are they planning to stay with you? Yeah, they played an essential role. So the auto group was our founding investor. They have done the first capital commitment that brought us till 2018. And in 2018, we took Anders Poulson on board. For those who are not familiar with Anders, he is a kingmaker in fashion, I would say. He invested very early days in ASOS. He's the largest shareholder of ASOS, which is the UK market leader. He invested very early days in Zalando, continent European market leader.

He has invested in Boost, the Scandinavian market leader. He's one of the top investors of Klanar, for example. And he does very few investments, and he has an incredibly high success rate. And the reason for this is that he is actually the largest producer and wholesale distributor of fashion brands. So he's also our largest supplier and probably also the largest supplier of Zalando and ASOS. And out of these insights he has through his own business, he then invests into companies that he believes are the future winners. And in 2018, we were doing a fundraise. We spoke to all kinds of private equity companies, et cetera.

We had huge interest. But in the beginning of this process, we always said, Anders Polson would be our by far most favorable, most favorite investor because he's the most well-educated person in the market, since he's not just an investor in all of those companies, but he's also in the supervisory board. So nobody has more knowledge than him being market leader as a supplier, being invested in the market leaders in other territories, and getting him as an investor is the best proof of the strength of our business. And, yeah, ultimately we succeeded. We brought him on board. He invested $250 million out of his private pocket into our company. And that allowed us to internationalize and to really accelerate the internationalization, which resulted in today 26 countries that we are active in.

And in June last year, we have IPOed the company at the Frontfoot Stock Exchange. And on the question, what is their long-term plan? So they are for the long-term. They are a huge believer of about you. they believe we are one of the future winners of this huge market and therefore they from everything I know they are in for the long term maybe you had such talks with them what do they like with you and why did you did they trust you with their money do you have any feedback on this yeah I think it's a combination of things yeah first of all

they are a big believer of the market overall as we are yeah we talking about a $450 billion dollar market in Europe alone. This is total fashion. And less than 20% of that was digitized pre-COVID. And yeah, we and the market believes that obviously there will be further offline to online shift. So being an online player, first of all, gives you a bit of tailwind. Now, within the online segment, we can conclude that it's actually much more fragmented than people usually think. So take the six largest online pureplay platforms, being Amazon, Zalando, ASOS about you and VUHU, and Fafatch, sorry, it's in a random direction, is not sorted by size now.

Now, these six players are just accounting for 25% of the online fashion revenue, i.e., 75% is still in the hands of omni-channel players, catalog players, basically players with a heritage, or in other words, legacy, and to a very, very slight extent, also the DDC of brands. Now, we believe that the market will further consolidate and that there will be an oligopoly of, I don't know, three to five online pure players making up for more than 50% of the online share and the legacy players will have a hard time succeeding and surviving, and then the DDC of the brands will grow. Now, if you take that target picture of the market, I believe we are in the best position

to be the leader of this oligopoly within that online pure play. bucket making more than 50% of the total market. And we are also making our money with the D2C of the brands because we are supplying them with the infrastructure. Through our B2B business, we are supplying them with technology, with logistics, with customer service, and partly also with online marketing. So we are making money with both parts of the market that we believe will be the vast majority of the future market, let's say, in 10 to 15 years.

So this is the first point where they invested in us. They also believe in this market target picture. And that target picture means we will become quite large. Secondly, I think the question within that online pureplay bucket, so compared to Acer, Sanando, who's, you know, all these online pure players, I think the question is who has the best structural business model? And here we believe we have several tailwinds behind us. First of all, we still see an increase in smartphone usage.

We have the best smartphone app. We still see an increase in social media usage. we have by far the most advanced social media strategy. And thirdly, it's the target group. We are serving the Gen Y and Gen Z. And this is the target group that is obviously expanding its fashion spent. And we see that this target group is very loyal and sticky to the module and is actually increasing their spend every year.

And the third reason is more of a softer reason. I think from a DNA perspective of a company, the question is which DNA of a company is the winning DNA. And here we believe it's clearly a technology DNA that you have to have to win. And we are probably the most technological company amongst all players worldwide in the online fashion space. To summarize it, you're planning to build a powerhouse here. How is this powerhouse connected with your investors?

Is there any overlap? Are your operations fully your own? Or are you also running parts of autos or other investors? capabilities or networks? I think, first of all, it's important to state that we are an independent company. I mean, that's pretty clear, I guess, because we are listed, but I think it's important to state that. Independent means we have enough capital on a balance sheet to execute everything we want.

We have an independent supervisory board, and we have obviously our own operations, so buying logistics and so on and so forth. Nevertheless, we have business relationships to our, investors, but everyone in the industry has. So Otte Group and Bestseller are two major players in this industry. So everyone has business relationships to them. And the business relationships we have is with Best Seller, obviously they are a supplier, as they are supplying everyone in the industry.

And with the other group, we have connections since they are part of our marketplace. We are part of their marketplace. It's a very minor part of the revenues of the respective companies. but there is some kind of marketplace connection there. Furthermore, they are also a client of our B2B business. So a lot of companies within the auto group are using our technology. Nevertheless, this has nothing to do with them being a shareholder. So the subsidiaries of the auto group are also independent,

the independent decision to take whomever they want in terms of technology, but a lot of them have actually decided for our technology. Coming back to your vision, it's a bit work. how you formulated it there's no clear time goal maybe you can explain a bit the goals you have that are concrete out there and how should we think about this idea of global leadership when is it something you want to achieve is it five 10 15 20 years yeah um so let me start with the milestones that we have communicated to the capital market i think there are two important milestones looking at our P&L,

the first one is hitting break-even in our next fiscal year. And second milestone we have communicated is reaching $5 billion in net revenue in 2025, fiscal year 2025. And here we are still very confident to reach those two milestones. On the vision of becoming the global number one online fashion platform,

this is obviously our North Star. I mean, there are two ambitions and ambitious and formulated in that sentence. One is the ambition of being a global player. This is a commitment towards geographical expansion, which we have greatly delivered on in the past. I mean, we are now operating in 26 countries. In 2021 alone, we have opened five new countries and ramped up, being the large southern European countries. So we had market entries in France, Italy, Spain, Portugal, Greece.

And all of those market entries have been a huge success for us. So the capital efficiency we see is always higher than in the Dach region. We see the model resonates very well. The cohort performances are great. The customer acquisition costs are great, et cetera. So global for us is a commitment towards geographical expansion. If we see that the countries have a promising prospect in terms of us becoming number one or number two and delivering great return on investments on the marketing expense we are doing.

But there is no timeline at 10. because also this is not a this is not globalization or geographical expansion is nothing we do out of our ego it's something we do very much based on data yeah so what we are doing is we are usually soft launching a country through a global shipping option we are serving the country in an unlocalized way so not translated and then afterwards we gather data and we build up our statistical models around the customer acquisition the error eye on marketing spend and the customer some lifetime value and just if the data indicates clearly that it's a good investment to launch this country we are doing it so global is a very vague um vision and it's not it's something that is more the result of data rather than the rather than something that no matter what don't want to build an empire no yes it's not something driven out of an ego it's not not something, you know, it's not a briefing global. It's the, it's the expected result of what we are doing, basically, yeah, but the decisions are always taken on a data basis and purely on

the question of positive ROI. And secondly, the number one, it's pretty much the same. It is rather a result than a briefing, because what we can see in the past is we have grown with a keg of more than 90%. So we have clearly outgrown every fashion ecommerce model in the world by far, while improving our margin year by year, while having a profitable core market with the Dach region, with EBITDA margins about 5%. So profitability is proven, yet we are still outgrowing every competitor. And we believe that the reason for this is that we have the structurally best position business model. Now, we obviously believe that this will hold two going forward, and then again, becoming the number one as a result of us having the best business model and

continuously outgrowing our competitors. But on both things, there can't be a timeline attached as this is just the result, not it's the output, not the input. If you're growing that fast, you also have to be willing to adapt, change, and also give certain things up while keeping it true and increasing the value proposition with your core things. Like what things looking back to seven years and maybe also trying to look into the future, will you think that will change and where are

unchangeable things or things that might be if we talk five years five years in the future again are more or less the same? So I think let me start with the things I think don't change. First of all, we won't start running around naked. So people will continuously buying fashion. Now, we are talking European-wide, Europe-wide, we're talking about 450 billion market size worldwide. We're talking about more than a trillion yearly revenue done with fashion, way, way more than a trillion.

So I think people will continue to spend money on fashion. Now, what I also believe will continue is the rise of online. I don't know what the target or what number needs to be achieved to have a kind of a plateau and online growth. But I guess it will be somewhere around 50-50 because this is also what you're saying. see in the younger generation. It's roughly 50-50 distributed, yeah. 50% of the event is online, 50% is offline.

Now, let's take this as a basis. Then we are talking about an online fashion, total address in the market of more than 500 billion worldwide. What I also believe will continue to be the case is that the winners will win. The larger player will have a benefit and the multinational player will win over national a player and the technologically driven players will win over the, I would say, non-technologically driven players. So that, I believe, will continue to be the case.

What I think will change, though, is customer behavior because this constantly changes. So the way how customers want to get inspired, the way how customers are shopping, it might be the device that changes. Nobody knows what the next wave after the mobile will be. Live shopping is a new topic. Nobody knows what the next topic will be. social media channels and taking, you know, marketing example, you know, we came out of a Facebook world, now we are on an Instagram world, tomorrow we are probably in the TikTok world,

nobody knows what the next social media channel is. So these things will change. What also will change is the question on which brands do we sell. So we see that brands have a life cycle. Some brands are hot now and that tomorrow, some brands are, you know, not yet existing and will be hot tomorrow. So the stuff we sell will change. Now, the good thing is, this is more or less irrelevant for the success of our model. Since we are a multi-brand platform, we are not depending on the success of a certain brand. So for us, it's more or less irrelevant, which brand is hot. As long as we make sure we have all brands available, which we have, it is not a, I mean, we don't really care. We also don't really care what the next trend is

in fashion, you know, because we cover everything. So we believe we need to make sure that we are, that we remain technological leader and that we remain as flexible as possible. when it comes to a supply model by combining stock that we buy and having our own warehouses combined with marketplace. So having a hybrid model, basically hedging risks, we need to continue to be multinational to hedge countries. And if we do so, then everything else will follow. So we will remain innovation leader.

And we are sure that we will be a lot, that we can take a large, chunk of this, you know, future 500 billion global online fashion share that is about to be evolved. So how has change managed on the level of about you? What drives change in about you? Is it gut feeling? Is it data? Is it a combination of both? How would you answer that? The answer is super clear. It's data. And if it is data where data is available. Yeah. So, We are driven by a broad target picture of the market that I've described and our decisions, but this is really more or less the North Star, yeah, but our decisions are purely driven by data.

So what we are doing is every euro that we are spending, be it on stock we buy or be it on marketing, every euro we are spending must answer the question on how this euro is generating a positive return on investment and this answer must be backed by data and how are you managing to do risky bets with this framework because sometimes you don't have the data and especially in marketing you sometimes need to try new things to see if they work absolutely i mean that is part of the game um calculating risk is also part of the calculation i would say and trying out stuff where before you can just, you know, come up with a hypothesis on what happens, but you can't really prove it mathematically is part of the game.

I mean, that is basically calculated in, yeah, and we need to take risk. I mean, we need to try out new channels. I mean, let's take the example of TikTok. I mean, when we started our initiatives on TikTok and started to spend the first euros there, we obviously had no historic data on the question of whether this performs or not. but I think that must be part of the strategy and part of the calculation that parts of your marketing budget, parts of your buying budget needs to go on new things. And there you are basically calculating with a high failure risk, yeah, but then it is incorporated. So when we think about return on investment in marketing, we take that so the proportion of basically risky new stuff is in there.

So if we think about how much does a customer cost us, it is a combination. on addition of the things of the money we spend with with a very high significance in our data on whether that makes sense or not, plus the stuff that we are trying out. But I think it is important for a company like about you that has the ambition to further outgrow competition and stay on the innovation forefront to continuously making bets and trying out new things. And then, and I think that is the important difference to a lot of other companies is after we have done it, we then need to make sure that.

we really gather the data and you know find out whether this had a positive error or not how did you come become the taric you are today maybe let's switch this this this change also on a personal level maybe imagine you you meet a friend you've met never met in the last three four years and what would they tell you how you've changed what is what others discover about you that has change in your role as this leader of about you i mean i have this situation every now and then still living in hamburg grew up here went to school here so i'm meeting people that i know from school time quite often and i think what they usually say is that they are surprised that they have the feeling that i haven't changed maybe that's also partly because i started with

building companies quite earlier i started with my first internet projects when i was 13 now i'm 33. So I'm doing this for more than half of my life. It is basically, I mean, I don't know differently to be, to be honest. I registered my first company when I was 15. So, you know, usually you build your personality, I think, around 13 to 17, yeah. And in that phase, I was already an entrepreneur doing stuff in the internet. I started my first online shop when I was 60. So I'm an e-commerce for more than half of my life now. It's part of my DNA. It's part of my personality. And that's why I think, and I mean, that's, I believe that's why people that know me quite long won't see a big difference in me. Obviously, the things that I'm doing have changed massively from the e-commerce or the online shops I ran with 16.

That is 17 years ago now. Obviously, the landscape has changed a lot. Back then, there was no Amazon, there was no Facebook, no Instagram, no nothing. It was a Google world. and obviously what we're doing now the way how we sell stuff has massively changed and that's what I would expect from the next 10 years as well the things change, the customer behavior changed

and the destinations where people spend the time are changing and we as a company need to be wherever the customer is but the overall mechanics of e-commerce are not changing and yeah that's why I'm actually happy to have the 17 years of experience and seeing you know, several waves of change to really understand what it takes to be prepared for the next wave of change and to come out of the next wave of change stronger than before. As you started about you, how many employees that you have at this time?

Yeah, basically just as founders. And then I brought into the company one of my former companies called Net Impact. Net Impact was a solution agency. I found it, I don't know, 10 years ago, so 15 years, I don't know. So I had a solution agency with a lot of online marketing people.

And my co-founder, Sebastian, which I've also co-founded companies together before bought you already. So we knew each other already for quite a long time. And he had a software company. So he was building software as a service products. And yeah, he brought in his company as well. and this kind of software as a service incubator and he had a lot of developers and by this we had a

very kind of i would say strong ramp up and quick start because we had my marketing guys his development development guys and with that we had i don't know maybe 70 80 employees made more less from day one and we knew them they were already a team they knew us so it allowed us to start quite quickly. We started the company in January 2014 and we launched about you in May. So it took us four months to go live, which is, you know, everyone who knows how complex an online shop is quite a quite a fast start. How many employees do you have now? Today we have a bit more than $1,500 in headquarters. And then obviously people working for about you are much more if you like counter logistics, customer service, etc. as well.

So with this growth on 100 to 1,500, how did your perception of governance the way also you had to give up some control because you don't know every employee anymore, you have to change this perception. How governance and measurement of the workforce, how has this changed? Yeah, I mean, it's constantly changing. It's a linear change. Luckily, it has not changed that much with the IPO because we were quite prepared, I believe, when it comes to governance compliance and all of those things. maybe also because, you know, our too large shareholders are corporate groups with Otto and Anders.

So I think governance for us was never a burden. It was always something that we believe makes sense when growing the company, but, you know, you shouldn't over-engineer it, I guess. Yeah, but I mean, obviously the company is changing. I mean, from the time where, you know, every employee to the time where the majority of employees you don't know, that is obviously a change, but I see good and bad aspects in every, I would say, every stage of a company.

I mean, I very much enjoy having 1,500 employees, and I very much enjoy that we are such a strong employer brand that we really attract the best talent. So whenever I'm in a meeting and I meet a new person, I still think, wow, this person is actually working for us, like crazy, like how intelligent, how Antigua, how cool this person. So I'm still very proud of the people that we hire. We have more access to talent than we have ever had before. We have more power than we've ever had before. We have more money on our bank account than we have ever had before. We can do great things. You know, it's a combination of, you know, smart people backing and supportive shareholders

and capital in the company is a very powerful thing and that I very much enjoy because in the very beginning we had none of that. We had no capital. We had, you know, very few people and nobody knew us. So that is something cool. On the other hand, obviously, there's beauty in the beginning, yeah. When you know everyone and this, you know, startup spirit and this attacker spirit, you know, this disruptor that you are.

I mean, that's also pretty cool. I mean, today, I believe we are still a disruptor, but also we are being attacked. Yeah, there are other companies that probably, I mean, are saying, this old Tarek, he doesn't get the things anymore, yeah, very much like, I thought when I was younger, I mean, when we founded the company, I was 25, yeah. I very much had the feeling of, you know, we are now really attacking and, you know, disrupting the industry because these old people, they don't know shit anymore, yeah. They didn't understand social media.

I had the feeling nobody understood the opportunity in smartphone, yeah. I mean, this is also pretty cool, I would say, in the beginning. That's why I also recommend every young person to join startups, you know. It is such a fun experience to be in a very early stage in a startup. The word old gets a good bridge to my next question. Why should a company from good old Europe become the global winner in fashion? Europe rarely won the online game. Why should it be different here?

Yeah, Europe, yes, that's very good point. Europe very rarely won the online game. And I am convinced that online fashion will be one of the very few industries where you will see global leaders coming out of Germany. Because if you look on how advanced Zalando and about you are, then this is so much more advanced than any other player in the world, at least in the world outside of China. I don't have a very good visibility on China,

but let's say on the Western world, there is no company being as advanced in the online fashion space as Zalando about you. Typically, you have a role model in the US that is much more advanced and then you try to do stuff, you know, kind of like them. In this case, if I speak to the US companies or our US, incumbents, I see, you know, they are like at least five years behind us. They don't have a marketplace model. They don't have a hybrid model.

They have no personalization. They have no technological skills. They didn't correct the whole social media game. They didn't correct the smartphone game. They didn't correct the inspiration game. You know, if I look on those companies, I have the feeling they are where we were five years ago. And I admire what Salando does.

I, you know, nevertheless, I believe we are a bit better in a lot of aspects. admire what they do and I'm a big fan of Zalando, keeping that innovation spirit while being that large. And we are often being compared to Zalando. But I, you know, my view is you can compare us to Zalando and that's a fair comparison. We always want to be compared with the best. And I believe Zalando is among the best companies in the world when it comes to e-commerce. But I mean, what I always find interesting when especially investors come with their market studies and then they're comparing us to the Zalando and then I always ask, you know, where? Where is the third one?

Like, if you look on the rankings of the several factors, you know, you see about use always slightly better than Zalando. But then you look on the third one. And there's such a huge gap between Zalanda and us and the third one that I actually believe that this market, that within that market, actually two German companies are probably in the by far pole position to become a global leader. And we are talking about one of the largest consumer categories being fashion, one of the most profitable consumer categories being fashion.

I mean, look on the list, you know, who became rich, basically. You know, fashion is a sector that holds a lot of profit pools. And two German companies are really in the best position to correct that market. And that makes me very proud. And I'm sure in 15, 20 years' time, you know, maybe I don't know how long it takes, but the world will realize that two German companies actually are leading the global online fishing space. How hungry are you for the U.S. market? And are there any role models you're looking at blink, blink, hello fresh, for instance,

that made it in the US? I'm also proud of Hello Fresh, yes. I really am, yeah. I think we are so far behind in Germany and Europe with our technology companies. And I'm proud of every example that made it outside of Europe. So outside of Germany, at least. So kudos to Hello Fresh. I mean, how bullish are we on the US market?

You know, I'm emotionally never bullish about anything, but I'm looking at our data. And what our data shows us, the U.S. is a, you know, consumer-wise, a very interesting market and a very underpenetrated one. I mean, who is the competition in the U.S.? People always compare us to Revolve. I mean, Revolve is so much smaller than us. Revolve is in the U.S. doing less revenue that we are doing in Germany. Revolve is a great company. Don't get me wrong. I admire what Revolve did in marketing and the way how they worked together with influences. I admire what they did in their own label.

at a positioning being slightly more premium. But if I look on the structure of the business, it very much reminds me on the businesses that we saw in other smaller European countries. Like, whenever we go in a country, we see that there are a couple of mini salandos, I would say. And the way how revolve structure reminds me on the companies I see or we saw in Czech Republic, for example.

There was a company called Zoot or, you know, there are other companies and other countries and they are very much structured like what I see in the US. And that is very much untechnologically, not hybrid, not marketplace, not smartphone, not personalized, not data driven. Just, you know, having access to suppliers and selling it in a very traditional e-commerce 1.0 model. And that is, I mean, that is somehow surprising, yeah, for the size of the U.S. market. And I believe one reason why the market in the U.S. is lagging behind is that in very early times, actually, Amazon became very successful. And the appetite of investors to invest in early stage e-commerce companies was very low. So if you look under successful companies in e-com,

they were usually bootstrap because there was no capital access. And in Germany, this was different Thanks to Rocket, to be honest. Rocket somehow managed to open capital X's for early stage eco-models. And if you look on HelloFresh, Sanando and a couple of other e-commerce models, they somehow all go back to Rocket Internet opening that capital access. So I think that is the structural reason why Germany has those winning econ models where the US has none, because these models were just not founded and funded in early stages. And I believe the US is a market where we,

could be very successful. Nevertheless, the question is, you know, whether or when we go to the US and this is driven by our data because equally there are also a lot of other markets that are heavily underpenetrated when it comes to competitors and very interesting in the world. So the US is not the only interesting market. And that being said, the most competitive market and competition-wise over-penetrated market is the German market. Everyone's place in a German market. Often the U.S. guys forget that Amazon is stronger when it comes to penetration in Germany than it is in the U.S. because sometimes an argument is, yeah, Amazon is leading the online fashion space in the U.S. They are not. I mean, they are, but it's not a sign of weak

competition, yeah, because they have the same proposition in Germany and here they're not at all leading the fashion segment. We are doing more revenue than them in continent of Europe. So Germany is a very, very highly competitive market with Salando, Otto, Amazon, us, Aesos, everyone playing in a German market, basically, whilst the German demand is actually not very high. So I actually believe that you have to think in a way, if you make it in Germany, you can make it anywhere, yeah, at least when it comes to e-com,

because it's the complex, the most complex market, it's the structurally worst market with the highest return rates, with the highest competition combined with a very weak customer behavior because Germans tend to not spend that much and rather save money than spending it on consumption. And that is another reason why I believe the global leaders in e-commerce next to Amazon will come from Germany because it's the toughest market and every other market is easier than Germany. And we also saw that in our internationalization. Every other market was more capital efficient than Germany.

You already outlined this a bit in your other end. But why can't Amazon and Zalando, if they adapt, crush you? What holds them back from taking your position and what do you solve to turn the coin around that they don't solve? Yeah. I mean, they obviously tried, yeah. I mean, Zalando had, you know, several initiatives of copying about you. Maybe they wouldn't phrase it like that, but at least I saw initiatives.

Yeah. So they, for example, launched two apps. one was called Fleek, and another one was called Amaze. I think this was, I know how many years ago, both are shut down now. I'm not successful. I think, you know, Zalando has a great business model, but they can't incubate new companies. At least they didn't succeed in that in the past. And they are sitting on a great model.

You know, their model is fulfilling the demand. People are going to Zalando with a certain demand in mind. let's say, I need a jacket, and then, you know, Zalando guides you to the jacket's category as fast as possible and gives you every jacket available in the market. It's a great model. It's a profitable model. Now, the question is, can this model be transformed into the boat-you model?

Yes, it could, but then you're losing the model because you can't be both. Why? Because imagine a customer is coming to your website with the demand of buying a jacket. Now, would it be rational to show this person all kinds of inspirational elements, like celebrities, outfits, and so on and so forth? And the answer is no, because this would actually harm the conversion rate of a customer that comes with a clear demand. If someone comes with the clear demand, you need to drive them in the conversion funnel as fast as possible. That is the playbook of e-commerce, basically.

And showing all kinds of inspiration actually drives down the conversion rate. And also, Zanano has not the perception. And same holds true for Amazon. Everything I just said is holds true for Amazon Enzalando. Both have not a perception of being destinations to stroll around as we have. Therefore, I believe they are and should be happy in the segments that they are in. It's profitable. It's still growing.

It's great segments. They are leaders in those segments. And we are happy in a segment that we are. Nevertheless, obviously everyone is also tapping to a certain extent in the field of the other. So on About You, there's also a search bar. On About You also find a category navigation. Yeah, especially on the desktop website because on desktop we see more people are going to about you with a clear demand when they visit our desktop website. Yeah, that's why our desktop website is similar to Zalando.

Our app is a bit different because people are using our app usually are on this discovery destination. So Zalando, on the other hand, also puts a lot of inspirational elements in their app. So I believe, you know, the clustering of the market is not crystal clear, yeah. everyone is doing more or less everything but there are i would say um there there there are focuses of the respective markets and on the other hand we also see offline you know on h&m sitting next to a zara and sometimes it's also about brand perception why people choose one player or the other all of that being said i believe the risk of us being attacked by the larger incumbents that we have like Zalando and Amazon has been high in the very beginning

because they immediately realize how interesting our segment is and had become very, very low now because now we are sitting on the same resources as they and it will be, I mean, in the very beginning I think they could have taken us out of the market and they missed the opportunity because in the very beginning we had no resources, no brand, no capital, no nothing.

Now we have it. And now I believe we will be able to defend, our position and even extend our position and it will be easier for us to go in their segments than for them to go in our second if we do this competitive comparison with amazon solando and other online players what role does price play in your model compared to the others are you the leader on prices are you price aggressive how do you think about pricing so if we compare prices to our incumbents everyone has more or less the same price because everyone is crawling everyone. Nevertheless, if we look on the actual discount rate from what we hear from suppliers,

from what we can arrive from publicly listed information, we believe we have a less high discount rate. Now, how does this work? So we have the same offering price, i.e., if on annual our compound incumbents, the product is reduced by 20%. It will most likely be also reduced by 20% on our platform. Yeah, more or less. Nevertheless, the sold items have a lower deduction. And that is because of our discovery model. So customers in the discovery model, you know,

to a larger extensive full price items. And that's why even though we have the same offering price, the demanded price deduction, in our case, is rather more full price because we can steer the demand a bit better than a model that is actually just fulfilling an existing demand in our conversation you also mentioned like three words i want to do a bit of follow-up the new competitors one word that came into my mind is acquisitions and you also mentioned incubation how does like maybe let's start with incubation what does it incubation play a role for you that for certain topics you incubate teams and let them work on building something

new? Yes, we do. I mean, the whole own label activities kind of were incubated. A couple of years ago, we started to develop exclusive products together with celebrities. Obviously, had been incubated an important pillar of our strategy today. The whole B2B part, licensing out our software where I had been basically incubated, but all became basically a core. So we've never set up a new legal entity or something for that. So it's part of the about U.S.E. And, yeah, we like to incubate new projects and try out new stuff.

And I think it was going forward. And also today, stuff that has not been published yet, we are obviously working on, you know, extending our business segments. And how do you think about acquisitions? is this a thing you do you like to do or do you want to better build it internally and then have this offer as well we have already taken a look on other smaller competitors those minisalandos and other countries and always decided against an acquisition i think that was a wise decision because looking back sometimes we could have gotten the companies more or less for free yeah

But that would still have been a mistake because building up revenue for us and profitable revenue is not very expensive. We are very capital efficient in expanding, you know, opening up new countries and profit pools. And on the other end, acquiring a company that's close to our core takes a lot of, you know, defocation of a company. So we would need to integrate them. We would need about thinking to rebrand them because we are a strong believer of global brands. and not about fragmented branding and, you know, us being named differently in every country. It creates a lot of complexity. So actually, even getting a company for free, getting Minnesota for free in a respective country for us would have been a bad deal, we believe.

And also looking back and continuously having high capital efficiency that hold it true. On the other hand, what we believe, though, and what we have already done, though, is acquiring technological components yeah so we have acquired a company called at ference for example and that what is that was a bidding system for marketing yeah so it automated and made you know Google advertising more efficient and I can imagine us buying technological components also going forward especially now that we are scaling our SaaS business yeah there might come an opportunity across us where it is rational to buy a technological component and integrate either and about you in our technological core or within scale. So I think MNA can be interesting

for us, but it will be rather small, yeah, compared because it's either an equitire or it's a technological component. So I don't see us buying like big companies in the near future. Yeah, nobody knows what happens in the mid to long term. What we also did in the past was we invested in fashion companies in small fashion labels. We did an investment in 6pm, for example. That's kind of the supreme of continent Europe, I would say. It's a hot, hyped fashion brand, which we have invested in. Plus, we are giving them our, or they became a client of scale or B2B units,

so they're using our technology, we internationalize them, et cetera. And we have invested in two other companies with whom we are incubating celebrity brands. So these are all, I would say, very small things where it's, you know, somewhere in between an acquihire and, you know, a little, I would say, early stage investment in something that structurally helps our business and is not within our core business or not a multi-brand fashion platform. What data has driven these investments into the fashion brands? What have data if you looked at? I mean, it was what they did and what we believe can be unfolded with our scale commerce engine. So let's take the example of 6pm. They're operating in Germany.

They're highly successful. They are this hot brand with like Supreme. So they drop new products every one or two months. These products are then being sold out in like three minutes or something. It's crazy. And then there is a second market where the stuff is being sold for three times the price. Yeah, so it's a very hot brand, very much like a superior. Now, they are doing great marketing.

They created great brand heat also on an international level, but they struggle with the whole technology and operations. And we as scale, we can help them with our technology to internationalize and with our operations to internationalize. and but we believe that much in that business that we thought I mean it's great if they become our customer yeah but we actually want more than just the fees that we are generating we want to have a part of the value that has been creating by using scale

and that is the rationale behind that investment action we are already in the machine room so let us switch to the terminal where's new countries and global expansion so what is the playbook if we open this tournament how do you what data does influence your decision to take new markets what is happening after the idea to take this market what are the steps you do to roll out about you yeah so the data it's basically two questions that we need to get answered first is are we able to scale to a number one or number two position within let's say three to five years in that respective market and the second question is are we able to

to hit break even after, again, three to five years max. If both questions are answered with yes, then we follow on, yeah, on the country. And we try to calculate the return on investment and capital efficiency. And then we prioritize country rollouts, basically by capital efficiency. And by size, achievable size, basically. And achievable profitability. So this is basically the data that we gather.

It's now very, you know, very much simplified. So the calculations behind that are much, much more complex. And we are rather looking on the drivers and customer acquisition cost, customer lifetime return, behavior, behavior, and so on and so forth. So there's a lot of data. But ultimately, these are the two questions that we need to get answered, number one and number two position and break even up to three to five years and the required capital efficiency to get there. And if everything is answered with yes, and this answering usually takes us. six to nine months of data gathering in the market, first-party data. So we are in the market, we do marketing, we acquire real customers.

So this is not a calculation that we do in the blue, but it's actually based on real data. But then after the six to nine months and when the decision is taken, we are then having a playbook on how to roll out in new countries. And that playbook basically functions as follow. We are shutting down our website, pretending we were never there. And then there's a countdown on the website, but not revealed. feeling who we are and then you can input your email address and get a notification and then we inform you in parallel in that one week we are doing a lot

of social media bus and guerrilla campaigns where for example you see outdoor posters saying Amsterdam will be about you with our logo and then below it always says starting on the 10th of October for example or in front of a university it would say the campus will talk about you always be about you in our logo fund and then starting on the 10th and in social media influences are wearing t-shirts where it says who the fuck is about you and um you know this is you know the idea or you see a television spot sometimes yeah we see people from the back and then you know bumping beat and then it says you know there will be something new about you and you know

bumping beats people from behind being excited and then at the very end you see a countdown three two one and you see a situation where there's a party and then you see the countdown three two one and then boom boom boom and then it says starting on the 10th of october yeah and this is you know and you know still when i talk about it it creates goosebumps for me because so great i can tell you it works everywhere everyone goes crazy and excited and the most funny thing is so let me let me maybe continue with and then i tell a small anecdote so we are starting we're saying it starts on the 10th of october for example yeah and then the day before the 10th of october there's a launch event in the night

where you know influences celebrities are invited and then we do all kinds of scenarios where people can experience who we are

i.e. the most personal and fashion the most inspiring and personal and fashion online shop in Europe so for example people get a little NFT ship in their wristband and whenever they pass a television the logo changes from about you to

about their name yeah it's pretty cool it's very surprising very like discovery. People really enjoy it. It's a great party. And then at midnight, we actually staged the scene that you already know from the television. So there's a big party. There's confetti. And then there's a countdown and there's a booming beat like two minutes before. And then it goes faster. And then you see the countdown. And then at midnight, there's, you know, huge celebration, confetti everywhere. People going crazy. There's sometimes a little show like someone singing, doing some crazy stuff, and then we show a clip.

It's a 30 seconds clip, basically explaining who we are. And that 30 seconds clip is then also being streamed on television. And then in social media, the influencers in the days following to the launch, the influencers are showing their favorite picks from about you. So they order on about you and that they explain who we are, why we are so cool, and then they are showing the products that they have shopped by about you, and they are offering a welcome voucher for the country to test us. And this is also what you communicate,

most inspiring person online shop in Europe, and he's a welcome watcher test us for four weeks valid. And this is an amazing, amazing framework on how to ramp up about you in those countries. And I'm surprised that nobody has actually copied that because it is unbeatable, if you ask me. Because after those four weeks, the country knows us, for sure.

And it creates so much space, and that's the anecdote I wanted to tell. so I'm usually also attending the launch event. So obviously we are booking a hotel, yeah? So obviously we booked all our company. So we book a hotel saying, you know, here we want to book, you know, reserve, I don't know, 10 rooms, you know, because people from about your claim there. And then I had this, usually I'm the first one there, and then I check in for us, yeah.

So I'm there saying, hello, I would like to check in. And she says, you know, the receptionist asks, you know, oh, cool, which now I say, yes, what about you? And then there's always the same reaction. It's like, oh, about you. Ah, I saw you. like who are you i was talking to my friend and then the receptionist bumps the person next to hey these guys are from about you and then oh no way who are you like i was talking is it a new

netflix series or is it you know a new magazine or something with fashion right or something with lifestyle so they can detect it's something cool something lifestyle they usually understand it must be something with like fashion or lifestyle at least they're like people dressing up cool yeah but it always works you know it brings the people it really makes the people talk about You know, we are talk of the town for four weeks. And after that four weeks, everyone in our target group knows us. And then from that point on, our automated online marketing campaign start to kick in to then really, you know, monetize the brand awareness in the brand heat that we have built up. And in this five months, five weeks, we are spending a lot of money, tons of money on marketing.

It is the amount that we would usually spend in one year. We concentrate in five weeks, but we have detected that this is a super efficient model because nobody will ever forget about us because it's such an emotional and crazy campaign that everyone actually keeps in mind forever. Now, being a publicly listed company, sometimes this needs a bit of explanation because if we do big bangs and they are usually in the beginning of a season, so they are either in March, April or in September, October. So that means in those phases, in March, April and September of Clover, obviously our bottom line has massively kind of disturbed by this huge investment that we have done.

I mean, imagine we're launching in a country like Italy. We're talking about 70 million citizens. So this is a huge investment that we are doing there. But in the midterm, it is the smartest, most capital efficient way to enter a new country. And it's a mechanism that has worked in every country so far. And I also believe that this will also be a mechanism. that will work going forward from the pure mechanism. Obviously, the channels that we are using at SWITs are changing three years ago.

We were heavily doing stuff on Facebook. Now is obviously Instagram and TikTok. Tomorrow it will be whatever. You know, so the channels that we are using for communication will change. But this whole playbook of creating curiosity, making a huge crazy event, inviting the country, and then creating four weeks of crazy bus, basically explaining and introducing ourselves to the country. I believe that is a major factor for our large and fast ramp-ups in new countries.

Behind the show, you also have to make sure that you're able to execute greatly on logistics and deliver products if you have launched. What is your playbook there? Maybe name Italy as an example, because Italy is quite a big country in geography is challenging. Yeah, so this is a huge challenge for us. First of all, we are obviously doing a lot of market research to find out who is the favorite carry on the country, what are the most relevant payment methods. But then it's also a lot of optimization. So we need to make sure that the line holds to the countries are well set. The cross-border functions very well.

But these are things that this is exactly what we are doing in those nine months of launch phase. We're not just gathering data, but after let's say three months, we usually have a very good feeling, whether that might have potential or not. and then we invest the six months and really optimizing the customer experience. So we luckily ask every customer after the order on the NPS, yeah. So we ask for the happiness, we ask for feedback, et cetera. So six months of iteration with NPS feedback, we see the delivery time we had, we see what they have answered.

So we can really detect what is driving happiness in the country, what is driving customer satisfaction. And in those six months in the soft launch phase, we really calibrate basically our whole operations chain and make sure that the customers in this country are as happy as it can be. And this is another prerequisite, basically, for us doing the Big Bang. This whole crazy thing that I just described is, you know, answering those questions I've mentioned,

but also making sure that our customers are happy. So if all of that is answered with yes, then we big bang a country. And it takes some time to make sure operations is running smooth. Maybe also walk us through a bit how your logistics look like. Where do you have logistics centers? How optimized are they? How are you thinking about density in this network to increase density if you've grown in the market and to offer this quick delivery? Yeah, today we are operating two warehouses, one in Germany, one in Slovakia and one return center in Czech Republic.

And we are about to launch further DCs in the future. And out of those two DCs and one return network, we actually serve continental Europe plus the worldwide shipping, basically. So everything is done out of those DCs. Works very well for us. So the delivery time is always on par with our competitors. And it gives us great efficiency. And is there anything planned to increase density with two centers?

I'm a bit surprised that it's just like only two. Yeah, there will be more DCs in the future. Sure. Yeah, for sure. I mean, we are actively already working on future DC or, you know, next DCs. I think we have not disclosed where they are, but obviously we will extend our DC network going forward. Coming back to the idea of the global number one and maybe also using the chance to talk a bit about your strengths as a team as a management team, how are Hannah Sebastian? you qualified to build the number one online player in fashion? You know, I think I, you know, I couldn't have wished for better partners than Hanneson Sebastian. First of all, we are all equal, like we are all co-ceos.

I know like the US people sometimes are a bit surprised of that model, three equal co-COs, but we love the model. And it's by the way, also the model is kind of by accident. and I believe the model at Zalando had. They were also three co-seos. Now, what I love about our team, though, and that is kind of specialist, we are really different from each other.

Sebastian is really a technology person. He learned software developing at the age of 13, and Sebastian has founded his first software as a service company at the age of 15. He has done several Software as a Service products, and he has worked on several enterprise shop software projects prior to About You. And by the way, Sebastian is two years younger than me, so he is now 31.

So at the time of the foundation of About You, he was 23, which is a good thing because he had all these modern technological architectural things already in mind that are now cool and everybody talks about. You know, this is an headless architecture. This is mobile born. This is hybrid born. This is mobile first. This is the modern programming languages.

So this is such a huge advantage to have Sebastian as a co-CEO because he is a real software developer. He's really a technical person, but he's also a business person. He founded his own companies. He owned the 100% of the companies that were always profitable. So he is not just the smartest person I know. He's also the smartest technological person. I know and I'm sure he's actually the smartest technological person in Europe. Plus he has a business sense.

And he understands the industry, he understands enterprise, he understands e-commerce very well. So we couldn't be more lucky about having Sebastian. And I believe that is very special because think about it, how many European digital companies have real CTOs within the founding team? I mean, this is a U.S. model, yeah. I mean, on U.S. companies, you find that Mark Zucker, but probably similar profile to Sebastian. But in Europe, this is very rare. And this is such a, such a huge advantage. I think you can't overestimate this advantage here.

Disadvantage of having Sebastian on board. Now, Hannes, on the other hand, he was in management consultancy for a long time. He was then the head of strategy of Otto. And Hannes is a person, you know, when I met Hannes, it was, for me, it was a crazy experience because I was talking to Hannes explaining all kind of weird stuff I had in mind. yeah and nobody understood what i was talking about sometimes even i didn't understand what i was talking about and hannes is capable of understanding complex stuff in no time and then coming back and structure the thoughts and for most importantly he knows how to make a plan to execute all that stuff

because having ideas is worse as if you can't execute them yeah and hannes is a person he holds together the organization he structures the execution he structures the operations buying logistics all that really complex acid heavy stuff, you know, is all steered and managed by Hannes and he knows everything about that stuff. He understands stuff very well. You know, always if I talk to people that studied with Hannes, I always hear the same stories. Hannes was never in the university, never. Yeah. And then the day before the test, he read the book and then he did the best result. Yeah, he had the best university degree, even though he was never there. Yeah. I mean, that's Hannes. You can tell him something. He will remember it and he understands it.

no time. It's crazy how structured he is and how intelligent he is. And me, I think I'm kind of the marketing guy. I grew up with marketing. It's my DNA. I mean, I did online marketing before anything else. I do it since I'm 13. Yeah. I saw every wave of internet. I found it a couple of companies already before about you. They were always profitable. I know how to do profits in the internet. I know e-commerce by heart. I know online marketing by heart. I love online marketing. I love marketing. I love social media.

I love crazy stuff. I love telling stories. Gourriela campaigning. Sorry? You like guerrilla campaigning. I love, I love, you know, events. I love creating experiences. I love all of that kind of stuff.

And I love thinking big, you know. I love big visions. I love winning against others. And I think that's the perfect combination because me alone, I'm 100% sure about you would, I don't know whether about you would exist or whether about you would still exist. I'm not sure really. I think me alone, I couldn't have built that company

same holds too. I think Hannes alone would have not have built this company and Sebastian alone had no chance to build this company. So the three of us alone, we would have no chance but the three of us together are so strong and we are so aligned. We are sitting in

one room. We are fighting on a lot of topics, but at the end, we always find a very good solution, and everyone has their responsibilities, and we trust each other blindly, and it's just a very good combination, even though sometimes I hate the boss, yeah, and sometimes they hate me, yeah, but like it's, I think it's normal. It's kind of like in a marriage, I guess, with people that are totally different from each other, but that is the strengths of our team. And I think we have what it takes, and that was your question, we have what it takes to become

global leader because we have everything I believe that a company needs, yeah, it needs structure, it needs the ability to grow an organization, it needs financial compliance, it needs governance, it needs an operations that runs smooth and makes the customer happy and it needs, you know, taking smart bets when it comes to buying stock. All of this is covered by Hans. What it also takes or needs is a strong technology because technology is an enabler for great things. Technology is a driver for innovation and it needs someone that can attract technological talent. That is a huge challenge and all of this is covered by Sebastian. And you know,

you need someone that tells the world the story. And that is my part basically making sure everyone knows us and coming up with those crazy things like the internationalization playbook. You know, these are the things that you need to become a global leader. And if I look on our incumbents, they usually have one part of that very well. And the other two parts very weak. And you can also see this when looking on the management team. It's usually either, you know, just business

guys or, you know, it's just marketing guys. It's in Europe never just tech guys, unfortunately, but it's usually either marketing guys or business guys. They never have a tech person and they usually don't have this complementary team as we have.

And I believe, I don't think that this is the reason for our success, but I think that is one factor for our success. that we as a founding team are very complementary to each other and cover everything that it needs to be successful in equals. So what are you free getting from this journey, the idea of becoming the global leader? What are we getting from that?

You're already rich men. You can sit in the sun with your dog, enjoying drinks, and look on the Alstah or look at the ships in Hamburg and just chill. What drives you there? Hey, tell money here. I'm sure you're curious about the answer to this question, but this answer is exclusive to the members of my community Good Investing Plus. Good Investing Plus is a place where we help each other to get better as investor day by day.

If you are an ambitious, long-term-oriented investor that likes to share, please apply for Good Investing Plus. Just go to good minusinvesting.net slash plus. You can also find this link in the show notes. notes. I'm waiting for your application. And without further ado, let's go back to the conversation. What is your imagination for this afterlife? Imagine you became successful. You made a lot of money with this business and retail. Look at Aldi or Otto, you know, it's one of the business or IKEA that makes you rich. So what is your goal over the long term?

Tarek's impact Hannes impact Sebastian's impact on the world beyond it imagine you've made it first of all I'm also happy I think we already made it yeah but I think you know

we can make it even not the vision not the vision no you're right no we didn't make it to the vision but we make it to be successful and we have you know multiplied the money of our investors and that's also important for me

you know whoever puts money in our company should should come out with a return and then I can sleep happily. That's why we need to push the share price a bit, yeah, as well. So Hannes and Sebastian have different plans for their afterlife. I think I don't want to speak for them now, even though I know the plans from them, obviously. But my personal plan is that about use my last company that I found it,

because probably it will be impossible to copy that success. but also because for my afterlife and my second half of the life, I would say I envision working on social and on social and non-profit activities to optimize not on P&L but on impact on the society level. Furthermore, I am of the belief that actually passing money to your children is something that makes sense to make sure that they never, get into essential problems, I would say. Nevertheless, the wealth I have created for myself exceeds what I believe is necessary to make sure that they will, you know, they will never get

to serious problems. And then I have to believe that passing more money than actually needed is not, does not make sense for the society. And I'm actually a big fan of capitalism. But capitalism actually says money and value should be in the hand of those that are creating value and passing money to the next generation might mean that you are passing money to unproductive hands yeah and i'm not saying my children will be unpredictable productive but if they are productive they can build their own well yeah but if they want to do different things they should do different things. I don't think that becoming rich is at any point, you know, a goal one should have, yeah. I've never had that goal of I want to become rich. And to make a long story short,

I want to work on society, non-profitable things, impact-oriented. And I also want to use my private wealth and reinvested actually. And I'm not just, I not just want to fund my social activities of the returns of the wealth I have, but I also want to actually decrease my wealth over my lifetime and invested in things that I believe are right for the society and make it, but make it about you style. It wouldn't be my style to donate to someone and then, you know, whatever they do with it. But I mean, I somehow, I think I've built a network, I've built some capabilities. I want to execute that stuff as well.

So I really want to build an NGO that is capable of execute. on problems that society has, backed by my own money, which is a combination of returns of the wealth I have by investing in public markets or whatever, plus basically decreasing my own wealth. So this is my plan, but I'm not, I don't need to rush in that, because I have the feeling there, hopefully I have decades executing this, after about you, but I'm also very much looking forward to that.

to say, not optimizing on profits and revenues anymore, not following a vision of becoming the global number one in fashion, which I love. I embrace that vision. But equally, I would embrace, I think, a vision of how can we maximize, you know, impact, positive impact on society. I also love the idea of doing such things and reinvesting the money I've done based on the society we live in, based on the infrastructure that Germany gave me. I'm also happy taxpayers. because I believe, you know, I made my money and my wealth based on the education, free education in Germany. I drive on the roads that this country has built and that society has funded before I came

alive, yeah? I use parks. I use all kind of public assets like healthcare and everything in Germany is basically publicly organized. I use all of that. So I'm happy to give that back to the society that allowed me to have an above average lifestyle yeah um on the other hand i believe the public hand is not uh is in a lot of aspects not very efficient in managing public assets yeah and you know i believe i somehow have the skill to

manage stuff and why shouldn't i help the society and public hand to manage stuff more efficient to even better cater society and that is now very vague but my plan for my after vote you life but maybe that's a good point to follow off of of the record um because we're running out of time at this moment and i want to thank you for this great insights i hope i can welcome you back for another podcast episode because i still have so many questions my answers were also too long yeah no it was good if you have hannes you know he can he can give you sharp and dense answers on complex questions that is something i i still learn from him Yeah, but maybe we have the chance to chat again and to the audience.

Thank you very much for listening till here and bye-bye to you for now. Bye. Many things for inviting me. I hope to have you back. As in every video, also here is the disclaimer. You can find a link to the disclaimer below in the show notes. The disclaimer says, always do your own work. What we're doing here is no recommendation and no advice.

So please always do your own work. Thank you very much. much.